Payment Matters: CMS's Non-Hospital Training Rules Again Upheld

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In the recently decided case University Med. Ctr., Inc. v. Sebelius [PDF], the U.S. District Court for the District of Columbia upheld CMS policies regarding nonhospital training agreements as those policies were applied in 1999. As all teaching programs are aware, hospitals have been permitted since 1997 to include, in both their indirect medical education (IME) and direct medical education (DGME) payment calculations, time spent by residents training in non-hospital sites. As a condition to hospitals' receiving those payments, however, CMS regulations have required that there be a written agreement between the hospital and non hospital site and that the agreement specify that the hospital was incurring all or substantially all of the costs of the non-hospital site training. CMS then interpreted this policy as requiring that the written agreement be in place prior to the training actually taking place. Plaintiff University Medical Center challenged these requirements as applied to training that took place in 1999. The court, however, rejected the challenge.

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